Final salary scheme closures soar by more than half in just two years as Britain's once great pensions die out

The number of final salary pension schemes which have closed to all workers has soared by more than half in just two years.

Figures from trade body, the National Association of Pension Funds, reveal how over a third of gold-plated final salary schemes have stopped accepting contributions from existing members. In 2011 23 per cent of pensions were shut.

The statistics suggest cash-strapped firms are shunting workers into cheaper, but less generous, alternatives in a bid to rein in costs. The study found the number of firms with final salary schemes still open to workers was also falling fast.

Closures: Workers are being forced to sign up to less generous pensions

Just 12 per cent of final salary schemes surveyed let in new members compared to nearly three quarters ten years ago. With a final salary scheme workers get a guaranteed pension. This can be as much as two-thirds of their earnings on retirement.

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However, workers are increasingly being forced to sign up to less generous pensions, known as defined contribution schemes.

With these, contributions are invested in the stockmarket and the end annual income depends on annuity rates.

Tom McPhail, head of pensions research at advisers Hargreaves Lansdown says: ‘Employers have seen the cost of final salary schemes rise rapidly and have to deal with the uncertainty about finding the money to pay next year’s bills.’